Policy Section
Sponsored Research
Summary
Cost sharing occurs when a portion of the total cost of a sponsored project is paid by the University rather than the sponsor. Whether this cost sharing is mandated by the sponsor or volunteered by the recipient, the cost sharing becomes a University commitment and represents a binding obligation of the University once the award has been granted.
The University must ensure that cost sharing requirements of sponsored agreements are budgeted, accounted for, and reported in a manner consistent with the requirements of the sponsor and the University. Federally funded projects must meet the requirements set forth in the Office of Management and Budget (OMB) federal regulations.
This Cost Sharing Policy covers:
- The definition and types of cost sharing
- The cost sharing approval process, including:
- When cost sharing is permitted by the University
- The contractual, financial, and administrative implications that result from a commitment to cost share
- Allowable sources of funds for cost sharing
- Allowable and unallowable cost sharing expenditures
- Roles and responsibilities with respect to cost sharing
II. Who is Affected by this Policy
This policy applies to all sponsored projects. It should be understood by Principal Investigators (PIs), Grant Managers, Department Managers, Department Chairs, Deans, Dean for Research, Sponsored Research Accounting (SRA) and the Office of Research and Project Administration (ORPA).
III. Definitions
Federal regulations define “cost sharing” or “matching” as “the portion of project costs not paid by Federal funds.”
It includes both cash and in-kind contributions that a recipient makes to an award:
Cash contributions: The recipient’s cash outlay, including the outlay of money contributed to the recipient by third parties.
In-kind contributions: Non-cash contributions in the form of real property, equipment, supplies, and other expendable property, and the value of goods and services benefitting and specifically identifiable to the project.
Federal regulations make no distinction between cost sharing and matching. However, matching usually refers to the specific ratio between the amount of the award and the amount committed by the recipient, such as a dollar-for-dollar match or a 2-for-1 match. Cost sharing is a more general term and is used in this document to refer to both cost sharing and matching.
There are three types of cost sharing, two of which are required to be tracked and reported.
- Mandatory Cost Sharing: Project costs that are not paid by the sponsor and are required as a condition of the award. Mandatory Cost Sharing must be tracked and reported.
- Voluntary Committed Cost Sharing: Costs specifically pledged on a voluntary basis and specifically included in the award budget. Voluntary Committed Cost Sharing must be tracked and reported.
- Voluntary Uncommitted Cost Sharing (VUCS): Costs not required by the sponsor or included in the award budget. VUCS is not quantified at the proposal stage, and should not be tracked or reported at the award stage.
Mandatory cost sharing and voluntary committed cost sharing represent binding obligations of the University once the award has been granted. Since VUCS by definition is not budgeted it creates no obligation or reporting requirement for the University.
IV. Policy
For the purposes of this policy, please note a general reference to "federal regulations" is being used in lieu of specific references to each of the following CFRs: 2 CFR Part 200 (Uniform Guidance), 2 CFR Part 215 (Circular A-21) and 2 CFR Part 220 (Circular A-110). Please read the Notice of Award and the agency's terms and conditions regarding the applicability of these federal regulations.
COST SHARING APPROVAL AND GENERAL GUIDANCE
The University limits cost sharing to that which is mandated by the sponsor or is necessary for another compelling reason. All proposed mandatory cost-sharing must be approved by the responsible Chair, and voluntary committed cost-sharing arrangements must be approved by the Dean for Research before the proposal is submitted to ORPA.
- The PI should confer with the Chair and/or Dean regarding a cost-share strategy to meet the sponsor’s requirements.
- The Chair and/or Dean should then contact ORPA well in advance of the proposal deadline to discuss the specifics of the proposal and to determine the sources of funds to meet this requirement.
- After this determination has been made, the proposal is submitted to ORPA.
ORPA will forward all voluntary cost sharing commitments to the Dean for Research for approval in advance of the proposal submission. Committed cost sharing creates an obligation to the University and must be treated like any other contractual agreement. Cost sharing of direct expenditures represents a commitment of departmental, program, or University resources from teaching or some other University activity to support a sponsored project. Consequently, the University strongly discourages voluntary cost sharing arrangements without compelling reasons.
If a sponsor significantly reduces the award budget presented in the original proposal, a reduction in the cost-sharing commitment should be explored.
SOURCE OF FUNDS
The PI is responsible for identifying all sources of funds for cost sharing of direct costs. The University generally expects that some portion of this expense will be provided by the PI and/or the Department Chair. Non-federal funds can be used as a source of cost sharing ONLY when specifically allowed by the non-federal sponsor.
ALLOWABLE COST SHARING EXPENDITURES
Cost sharing expenditures must satisfy all of the following criteria:
- Verifiable from the official University records;
- Not included as contributions for any other Federal award;
- Necessary and reasonable for accomplishment of the project objectives;
- Allowable under the terms of the award and OMB federal regulations;
- Conforms to other provisions of OMB federal regulations, as applicable;
- Incurred during the effective dates of the grant or during the pre-award phase when authorized by the sponsor; and
- Not paid by the federal government under another award.
UNALLOWABLE COST SHARING EXPENDITURES
The following expenditures cannot be offered as cost sharing commitments in sponsored project proposals:
- Costs considered unallowable by the University or by the sponsor;
- Costs considered unallowable under OMB federal regulations;
- Salary amounts exceeding a regulatory salary cap (e.g., National Institutes of Health);
- University facilities such as laboratory space. PIs should not commit the use of facilities as cost sharing, but rather characterize the facilities as "available for the performance of the sponsored agreement at no direct cost to the project."
CATEGORIES OF COST SHARING EXPENDITURES
Faculty and Non-Faculty Effort
PIs are strongly encouraged to limit explicit commitments of contributed effort (i.e., effort at no cost to the sponsor) in sponsored project proposals, especially when contributed effort is not required by the sponsor or is not a significant portion of the PI’s total effort.
When cost sharing is not required as a condition of the award or mandated by the sponsor, the following statement should be inserted in the text of the proposal or in the budget justification:
“Princeton University fully supports the academic year salaries of Professors, Associate Professors, and Assistant Professors, but makes no specific commitment of time or salary to this particular research project.”
In cases where the faculty salary is not fully supported on central University funds, please contact your ORPA representative for alternative language.
If faculty and/or non-faculty effort is approved as part of a cost sharing commitment in a proposal, the University is obligated to fulfill that commitment once the proposal is awarded. A salary certification is required for the cost sharing effort as well as the effort charged to the award. A statement of effort in a progress report during the award period does not constitute a cost sharing commitment.
It may be appropriate to contribute non-faculty effort to the performance of a sponsored agreement. As with faculty effort, the commitment to provide such support binds the University to contribute the effort and record the associated expenditures, including fringe benefits. Likewise, a salary certificate is required for the cost sharing effort as well as the effort charged to the award.
The total effort for research and other University activities performed by each individual must not exceed 100%. Existing commitments must therefore be taken into account when evaluating a proposed commitment of cost sharing, especially when multiple proposals are being submitted.
Note also that significant decreases (25% or more for grants or an amount specified by the sponsor for contracts) in the effort by key personnel to a project require coordination with and/or advance approval by a federal sponsor. This applies both to committed cost-shared effort and to effort charged directly to the project. Non-federal sponsors may have similar requirements.
Equipment
Proposals which include the purchase of special-purpose equipment may include an offer of University funds to pay for all or part of the cost of such equipment. The portion of the purchase price paid by the University must be charged directly to a cost-sharing chartstring in support of the award.
PIs may not commit the use of existing equipment, whether University-owned or government-owned, as cost sharing. This equipment should be characterized as "available for the performance of the sponsored agreement at no direct cost to the project."
Other Direct Costs
The following are examples of other direct costs that may be used as cost sharing: tuition subsidy, travel expenses, project materials, laboratory supplies, and sub-recipient cost sharing.
Facilities and Administrative (F&A) Costs
When direct costs are included in a cost sharing arrangement, the associated indirect costs may be included as part of the University cost sharing commitment only with the prior approval of the federal sponsor.
Procedures
See Cost Sharing in Coeus Guidance
Roles and Responsibilities
Revision Log
9/20/10 - General: Language clean-up and updates to reference Prime, remove redundant information, updated links.
Policy: Removed paragraph referencing 2014 OMB Uniform Guidance Information and removed bulleted detail under Source of Funds.
Procedures: Removed links to outdated documentation; direct reader to Coeus Guidance.
Contact Roles and Responsibilities: Removed vague language regarding University channels.
3/21/19 - Update to contact information.
1/18/19 - Updated Director of ORPA.
10/1/18 - Updated Executive Sponsor listing.
2/27/17 - There are three types of cost sharing, two of which are required to be tracked and reported.
- Mandatory Cost Sharing: Project costs that are not paid by the sponsor and are required as a condition of the award. Mandatory Cost Sharing must be tracked and reported.
- Voluntary Committed Cost Sharing: Costs specifically pledged on a voluntary basis and specifically included in the award budget. Voluntary Committed Cost Sharing must be tracked and reported.
- Voluntary Uncommitted Cost Sharing (VUCS): Costs not required by the sponsor or included in the award budget. VUCS does not need to be tracked or reported. Cost sharing that is not included as part of the submitted proposal or subsequent award is considered voluntary uncommitted cost sharing and is not covered by this policy. Mandatory cost sharing and voluntary committed cost sharing represents a binding obligation of the University once the award has been granted.
8/29/16 - Updated to reference OMB Uniform Guidance Requirements.
2/21/11 - Copied to University-approved policy template; added “Section VI – Procedures” references; revised Roles & Responsibilities for Fund 30 P/G creation & adding SRA to review of allowable costs.
10/6/09 - Approved.